A group of shareholders in Royal Bank of Scotland (RBS) has launched a multi-million pound lawsuit against the state-owned bank for misleading investors at the height of the credit crisis in 2008, Reuters reported. In the first court document filed in the UK over the bank's record 12 billion pound cash call in April 2008, a group of 21 claimants - including international investors and pension funds - allege the bank published a defective prospectus littered with misstatements and omissions.

A unit of Russia's Alfa Group said on Thursday it had withdrawn its proposal to acquire Central European Distribution Corp, one of the world's largest vodka producers, through a restructuring of CEDC's finances. Alfa Group unit A1 said in a two-sentence statement to Reuters that it had officially withdrawn its non-binding offer to restructure CEDC. It also said the two other members of its consortium, CEDC investor Mark Kaufman and SPI Group, which owns Stolichnaya Vodka, had been informed of its decision.

Blunt remarks by a leading minister saying European support for troubled banks is a last resort laid bare what has long been an open secret in Brussels: promises to create a euro zone backstop for banks may never be fulfilled. Designed to secure a level playing field in the euro zone and prevent vulnerable countries having to contain financial problems alone, a European banking union was one of the biggest political commitments made to underpin the euro.

The risks posed by hosting a large financial industry became a flash point on Wednesday as the Cyprus bailout trained the spotlight on other small euro nations that depend on the sector for jobs and economic growth, The Wall Street Journal reported. The issue has become a sore spot mainly for Luxembourg and Malta after the debate over Cyprus prompted European ministers and politicians to question the viability of housing a large financial center in a small country.

Germany has become so dependent on Deutsche Bank to grease the wheels of its export driven economy that it looks willing to gloss over scandals involving its largest bank, Reuters reported in an insight. Deutsche is one of several European banks under investigation by regulators in Europe and the United States for its suspected role in rigging benchmark interest rates. It is cooperating with German authorities in a separate inquiry into alleged tax fraud. Deutsche has denied allegations it misvalued derivatives and mis-sold mortgage-backed securities.

U.K. banks must come up with £25 billion ($38 billion) in fresh capital this year, the Bank of England warned Wednesday, piling pressure on partly state-owned banks Royal Bank of Scotland Group PLC and Lloyds Banking Group PLC to step up the pace of asset sales, The Wall Street Journal reported. The Bank of England's Financial Policy Committee said banks' capital buffers need to be higher to withstand the effects of the weak domestic economy and euro-zone crisis. Gov.

A pickup in temporary hiring through recruitment consultants can be an early sign of an economic rebound on the horizon, The Wall Street Journal Real Time Economics blog reported. In the crisis-hit euro zone, where the economy has been shrinking for 15 months, policymakers hope growth will resume later this year. Consequently, they might expect companies to be taking on temporary staff via employment agencies now, in an attempt to build up production without overloading on risk. That hope may be misplaced.

Britain's banks discover on Wednesday how much extra capital they need to keep regulators happy when the outcome of an inquiry into their financial health is revealed, Reuters reported. The Bank of England will release the capital requirements on Wednesday morning. The BOE's Financial Policy Committee, tasked with spotting system-wide risks, said in November that the shortfall could be anywhere between 24 billion and 60 billion pounds. Analysts expect the final number to be around the middle of that range.

The Spanish economy will shrink by 1.5 per cent this year and unemployment is set to rise above 27 per cent, the Bank of Spain has predicted, the Financial Times reported. The central bank’s latest annual forecast leaves little doubt that 2013 will be an even tougher year for Spaniards than last year, with housing prices also heading for yet another sharp fall. The economy will again be marked by weak domestic demand, a fragile labour market and tight financial conditions, the bank said.

Shares in Bankia tumbled by as much as half yesterday as the final steps of the largest bank rescue in Spanish history crystallises a near total loss for its shareholders less than two years after it listed on the Madrid stock exchange, the Irish Times reported. Bankia shares, which were listed in summer 2011 at €3.75 in a sale marketed to hundreds of thousands of retail investors and deposit holders, opened down more than 50 per cent at €0.12. They closed down 41.4 per cent at €0.14.